Morning Market Overview

The complex is strongly higher to start this morning on support from the API inventory report. The API started the weekly inventory report cycle with an expected draw in crude oil stocks, a larger than expected draw in gasoline inventories while distillate fuel inventories declined more than the expectations.

Crude oil prices were able to move into positive territory ahead of the start of the weekly inventory report cycle Tuesday. Refined products remained in negative territory with ULSD the largest decliner of the day. Inventories are expected to be slightly positive, but the externals played a positive role in the direction of crude oil prices.

Most global equity markets were higher with the US strongly higher by almost 1 percent. The US dollar direction offset the positive from the equity complex a bit as the US dollar Index was slightly higher. Above normal levels of volatility continue in the financial markets with it spilling over into the oil complex. We do not expect this to change in the short term. On the financial front global equity markets were mostly higher on Tuesday.

The EMI Index able to end the day in positive territory with a strong gain in US equities. The EMI Index increased 0.65 percent on the day with the year to date gain is at 2.3 percent. Four of the ten bourses in the Index are now in positive territory for 2018 with London holding the worst performing spot in the Index with Brazil in the top spot with an 9.9 percent gain for the year. The positive value direction in global equity markets today was a positive price driver for the oil complex.

On the currency front the US dollar Index traded slightly higher for the day with the Yen/USD and the Euro/USD mixed. Overall the currency markets were a slight negative price driver for the oil complex.